Gulf oil leasing plan faces court challenge

Monday

Dec 17, 2012 at 8:57 PM

BATON ROUGE —While members of Louisiana's congressional delegation continue to push for changes to the Obama administration's offshore leasing plan, an environmental advocacy group filed a lawsuit in federal court Monday seeking to dismantle it completely.

Jeremy AlfordCapitol Correspondent

BATON ROUGE —While members of Louisiana's congressional delegation continue to push for changes to the Obama administration's offshore leasing plan, an environmental advocacy group filed a lawsuit in federal court Monday seeking to dismantle it completely. The U.S. Department of Interior announced its five-year plan for oil and gas leasing over the summer with direction from President Barack Obama. The first sale was held three weeks ago in the western Gulf of Mexico, and it left Louisiana lawmakers such as Sens. David Vitter, a Republican, and Mary Landrieu, a Democrat, pushing the administration for more activity in the Outer Continental Shelf.Coming at the issue from a different angle is the Center for Sustainable Economy, an environmental advocacy group based in New Mexico. It's lawsuit against the administration seeks “far-reaching precedents that do away with inefficient offshore oil and gas drilling.”The case is pending in the U.S. Circuit Court for the District of Columbia and was filed by environmental attorney Steven Sugarman and by Michael Livermore of the Institute for Policy Integrity at the New York University of Law. The lawsuit argues that “incomplete and flawed economic analysis” led the Bureau of Ocean Energy Management, an arm of the Interior Department, to “rush ahead” with the first offshore drilling plan in the wake of the 2010 BP oil spill. As a result, the American public is being subjected to a “higher risk of catastrophic spills while failing to maximize benefits from lease sales.” Furthermore, the plan is in violation of the National Environmental Policy Act, the Outer Continental Shelf Lands Act and the Administrative Procedure Act, the lawsuit suggests. John Talberth, Center for Sustainable Economy president and senior economist, said Gulf drilling should occur only when it makes “compelling economic sense” and should be preserved for future generations. The most recent lease sales include 35 leases in waters deeper than what BP's Deepwater Horizon was operating in when it exploded, he said. “Instead, the Obama administration is rushing headlong into a program that will put our shores and oceans at risk and do nothing for America's energy security,” Talberth said. Obama's plan calls for 15 new leasing areas in the Gulf and Alaska that could produce up to 8 billion barrels of oil and 35 trillion cubic feet of natural gas. It also restricts activities on the Atlantic and Pacific coasts.The plan includes 12 individual lease sales for the Gulf, with the next scheduled for March 20 covering the central Gulf, which encompasses Louisiana, Mississippi and Alabama. About 38 million acres will be made available for investors. It will be held in New Orleans and “could lead to the production of up to nearly a billion barrels of oil and nearly 4 trillion cubic feet of natural gas,” said Interior Secretary Ken Salazar.At the latest Gulf sale for the western Gulf, the Bureau of Ocean Energy Management offered up more than 20 million acres and attracted $133 million in high bids for 116 tracts covering 652,522 acres.Thirteen offshore energy companies submitted 131 bids for the leases located off the shore of Texas. Vitter said the numbers were “well behind previously projected revenue levels” and was only the third since the 2010 drilling moratorium, issued and later lifted by Obama following the BP oil spill. Landrieu added the leasing brought in only a third of the total high bids expected, and it involved about 400,000 acres less than the last lease sale in the western Gulf.For them, the opposition to the administration's leasing is more about energy production rather than environmental and safety concerns. Vitter said he wants the department to go back to the previous five-year leasing plan that would have opened up nearly all of the Outer Continental Shelf for lease sales. The current offshore plan would keep 85 percent of offshore areas closed to new American energy production, he added.Landrieu said she is pushing legislation, known as the Offshore Petroleum Expansion Now Act, or OPEN Act, that would include an additional 11 lease sales above the administration's plan and open up areas in Virginia and southern California. The OPEN Act would also increase revenue sharing for energy-producing states and eliminate the $500 million cap Congress placed on revenues.